FBE - Chapter 23

directors

adopt resolutions to specify corporation actions during board of director meetings, can have 1 or more directors, typically serve 1 year terms, have inspector rights, can be compensated

types of directors

inside: people on board of directors who are also officers, outside: person on board of directors who does not hold a management position with the corporation

quorum (director)

simple majority (more than 50%) of directors must be present IN PERSON for the board to conduct business meetings

officers are …

agents of the corporation (bylaws and articles can provide express authority)

officers required

ceo/president, secretary, CFO (same person can hold more than one office, on person could be all of them)

directors have extra protection and can protect themselves through (duty of care)

dissenting (voting no), abstaining from voting, getting shareholder approval

directors and shareholders

NOT agents of the corporation

shareholders have power through..

threating to vote directos off

quorum shareholders

The majority of shareholders entitled to vote, can be present OR by proxy (voting through someone else) | need majority of shares PRESENT not total shares

shareholders allowed to vote

only shareholders who own shares on record date (if you buy shares after that can’t vote, if you sell after that can still vote)

types of proxy

directed (tell them what to do), discretionary (you give them freedom to decide)

annual shareholder meetings

elect directors, date fixed by bylaws, REQUIRED

notice of shareholder meeting

written notice is often required, only matters stated in notice can be considered at meeting, if notice if defective meeting is void

articles or bylaws may require a greater…

greater percentage of shareholders to be present for a quorum

certain shareholders can submit…

proposal to other shareholders to change company policy, must be submitted to directors and included in proxy materials, shareholder must of at least $2,000 stock for 3+ years, $15,000 stock 2+ years, $25,000 for 1+ year

voting rule in article of incorporation

cumulative voting